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How Canadian Grocers are Innovating Operations to Keep Up With Growing Online Consumer Demand

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Impacts of the COVID-19 global pandemic have changed just about everything we do and the ways in which we do them. For grocers, the effects have been significant. Highlighted by greatly reduced brick-and-mortar traffic and a reciprocal acceleration of online consumer activity and sales, the sector is currently undergoing a seismic shift toward digital operations. It has precipitated a need among grocers to find new and innovative solutions that will enable them to keep up with growing online demand while continuing to meet increasing consumer expectations. It’s all part of a massive disruption to the industry says Corbin Bourree, SVP eCommerce at SPUD.ca, and is one that he believes will only intensify going forward.

“Everything changed overnight last March,” he asserts. “Our website traffic immediately spiked to 600 percent year-over-year. It was absolutely incredible to see how quickly consumers became aware of online grocery, which amounted to less than one percent of total Canadian grocery sales prior to COVID. It’s on pace to be somewhere in the four to six percent range by the end of 2021 and will likely move into double-digit market penetration.”

Bourree says the expectations of the quality of service and produce, the timeliness and visibility of the delivery, as well as tertiary considerations like sustainability and reduced packaging, have all been raised. “The rate at which online grocery in Canada has evolved over the course of the past 13 months is staggering, accelerating adoption by five to ten years,” he says.

eGrocery revolution

“The rate at which online grocery in Canada has evolved over the course of the past 13 months is staggering, accelerating adoption by five to ten years,” says Corbin Bourree, SVP eCommerce at SPUD.ca.

Founded in 1997 with a mission to improve the health of Canadian communities by connecting them to local and organic food, SPUD.ca (a subsidiary of Freshlocal Solutions, Inc TSX-LOCL) has since rapidly developed into one of the country’s largest online grocers. Servicing parts of British Columbia and Alberta, the company’s logistics platform is built on Microsoft Dynamics 365 and is hosted on Microsoft’s Azure Cloud to prepare and deliver grocery orders faster and better. Although some of its recent successes may be rooted in the escalation of online trends, most of it can be attributed to the integrated food business ecosystem that it began to form long before the onset of the pandemic. It’s comprised of its online retail, commissary/food preparation services and distribution, as well as community retail locations, including two Be Fresh Local Market stores in Vancouver – the first of which opened in 2015 – and five Blush Lane Organic Markets in Alberta.

It’s an ecosystem that has allowed the company to scale and build awareness among consumers, infusing its operations with a level of agility that’s also contributing to its ability to seize the opportunities of the day. However, its greatest asset is the innovative thinking. It’s a mindset that’s resulted in a number of achievements for the company through the years, culminating recently in the formalization of FoodX Technologies – a scalable end-to-end eGrocery Management Solution (eGMS) built on Microsoft Dynamics 365 for brick-and-mortar grocers looking to build a profitable online business. The state-of-the-art grocery fulfillment platform allows multiple banners from each retailer to access industry-leading technology, warehousing, food preparation and delivery services, as well as a front-end ecommerce platform, reporting and analytics, and inventory management. It’s the holistic solution that’s helping SPUD.ca support the evolving needs of online grocery fulfillment, and one that Jef King, CTO at FoodX, says could help revolutionize any online grocery efforts.

“We’ve got the advantage of being in business in this space for more than 20 years,” says King. “For grocers leveraging the FoodX platform, it provides them with a truly end-to-end solution that will support their operation and help them implement and utilize warehousing to maximum efficiency. We leverage a mixture of the best human input and high-tech systems. We believe it’s a combination that provides any retailer with the flexibility to offer their customers exactly what they want.”

King reinforces that to be competitive in this market, online has to be a component of a retail business. “FoodX is poised extremely well in the technology space to provide that flexibility for retailers and to help open doors to possibilities that they didn’t even realize existed,” he says.

Digital transformation

Founded in 1997 with a mission to improve the health of Canadian communities by connecting them to local and organic food, SPUD.ca has since rapidly developed into one of the country’s largest online grocers.

Bourree agrees, citing the platform and its supporting technology as an “absolute game-changer” for any retailer looking to not only enhance their service and offering, but to take it to a whole new level. One retailer that’s taken FoodX up on its potential is Carrefour Group, a global leader in the grocery industry, with the commencement of operations of Carrefour’s new eCommerce fulfillment center in Belgium. According to Bourree, the platform’s potential is still very much untapped, adding that much of its continuously expanding capabilities and uses are being fueled by the data that it generates.

“Traditionally, Canadian grocery retailers rely on loyalty programs to gain data insights that are purely tied to point-of-sale transactions,” Bourree explains. “If you look at any unique order powered by the FoodX platform, you’re generating north of 200 data points per order when considering things like delivery preferences, substitution preferences, allergen concerns and more. The ability to take this data, leverage Microsoft Azure cloud capabilities and apply the human intelligence and capital that we’ve built up over two decades, along with machine learning and expertise that we’ve recently acquired, it totally transforms a grocer’s ability to serve the customer.” 

Bourree notes that ecommerce allows for a forward look that can gain purchases in advance of shipping them. “It’s why our food waste is less than 0.5 percent of sales,” he says. “It also allows us to maximize fill rates for customers, often trending above 99.5 percent as opposed to the 97-98 percent in-store fill rate that many grocers target. Combining FoodX’s knowledge and know-how with the advanced technology that it leverages makes for an incredible customer experience.”

Attention to detail

“For grocers leveraging the FoodX platform, it provides them with a truly end-to-end solution that will support their operation and help them implement and utilize warehousing to maximum efficiency. We leverage a mixture of the best human input and high-tech systems” says Jef King, Chief Technical Officer of FoodX.

King recognizes the importance of the customer experience, stressing that every decision to modify the FoodX technology is made with the consumer in mind. He points to the FoodX team and the attention and considerations that they pay toward improving every step of the online grocery journey as the real strength of the operation. He also suggests that the power of the warehouse and the underlying software that supports it cannot be underestimated.

“Inventory is the most critical piece of data within the warehouse,” he says. “Most of our successes are based on our depth of knowledge of the inventory in our systems. We run our warehouse on the Microsoft Dynamics 365 cloud offering. It allows us to optimize our inventory management and provides us with the flexibility to do a lot of innovative things and build a number of systems around it. It’s a vital layer of our business that enables a significant amount of creativity, agility and accuracy when it comes to our warehouse operations.”

Retail industry leaders are constantly looking for new ways to optimize operations, transform products, empower employees and engage customers. This is an era when connecting customers, products, people and data wins. Microsoft Dynamics 365 offers a modern and familiar experience with built in insights, intelligence and workflow.

Blurring the lines

FoodX Technologies offers a scalable end-to-end eGrocery Management Solution built on Microsoft Dynamics 365 for brick-and-mortar grocers looking to build a profitable online business. 

As consumer preferences and habits continue to shift toward the ease and convenience of the online experience, grocers across the country are advancing their digital strategies and enhancing their ecommerce capabilities. Online offerings that consistently provide best-in-class service and delivery performance will be critical going forward, not only with respect to the success of grocery operations, but to their continued evolution as well. And, according to Bourree, these expectations of the consumer aren’t going to subside any time soon.

“The big term around 2010 was omnichannel. We’re only now truly seeing and understanding what that can mean. We’re going to start to see a real blend between online and in-store shopping visits, more so than we ever experienced prior to the pandemic. Consumers will continue to adopt ecommerce and services like click-and-collect and use them more frequently. It’s going to continue blurring the lines of the marketplace. And, there will also be an increase in the consumer’s demand for a more seamless and personal mobile offering. It’s going to allow grocers with the right platforms and systems to leverage even more data to become more predictive and create a level of personalization throughout the consumer’s journey, entrenching their trust in and desire for online offerings further.”

For more information, please visit dynamics.microsoft.com

*Partner content. To work with Retail Insider, contact: craig@retail-insider.com

Article Author

Sean Tarry
Sean Tarry is an experienced writer who leverages his unique storytelling abilities to bring retail industry news and analysis to life. With 25 years of learning, including over a decade as Editor-In-Chief of Canadian Retailer magazine, he’s equipped with a deep understanding of the unique world of retail and the issues, trends, and innovators that continue to influence its evolution and shape its landscape.

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